BHP’s Olympic Dam mine. Image: BHP.
SOUTH Australia’s mining industry is seeing a renaissance with numerous new projects and the completion of several major developments.
WITH more than $1 billion committed to the development of mining and mining infrastructure across South Australia, the mining industry is continuing to be an important economic contributor.
South Australia Mineral Resources and Energy minister Dan van Holst Pellekaan said that mining was one of the key pillars of the State’s economy.
“The resources sector already supports jobs and business opportunities in this State and increasing the number of mines through exploration and expanding the ability of existing mines to increase production and mine-life will further broaden the critical role the sector plays in the South Australian economy,” Mr van Holst Pellekaan said.
“Our State has a strong pipeline of projects building on substantial existing investments in the resources and minerals processing sector.”
Olympic Dam
On 14 February the Marshall Liberal Government declared the proposed 75 per cent increase in annual copper production at Olympic Dam a major development proposal.
The $3 billion proposal would increase Olympic Dam’s annual copper production from 200,000 tonnes to up to 350,000 tonnes and increase the level of gold, silver and uranium production.
“Declaring BHP’s proposed expansion of Olympic Dam a major development is a key milestone in this important project,” Mr van Holst Pellekaan said.
“Olympic Dam is already the State’s largest mining operation, providing jobs, investment and royalties for South Australia.
“BHP’s proposal could potentially create up to 1800 construction jobs with an additional 600 ongoing positions in operational roles.
BHP welcomed the Government’s decision as an important step towards lifting its Australian copper production.
“Olympic Dam is a world-class resource with the potential to deliver value to BHP and South Australia for many decades to come, especially given our positive outlook for global copper demand,” Olympic Dam asset president Laura Tyler said.
“We are pleased the South Australian Government has declared Olympic Dam’s growth plans a major development, recognising our significance to the State.
“Our team continues to refine the scope for targeted underground development in the Southern Mine Area, strategic investment surface processing facilities, new technology and supporting infrastructure.”
BHP continues to progress growth studies for Olympic Dam as it works towards seeking board approval for a capital project in mid-to-late 2020.
Carrapateena
OZ Minerals’ Carrapateena copper mine was also almost ready to enter production.
“We have a target of tripling SA’s copper production by 2030 and Carrapateena together with BHP’s Olympic Dam, OZ Minerals’ Prominent Hill and Hillgrove Resources’ Kanmantoo mines are vital to achieving that objective,” Mr van Holst Pellekaan said.
“Carrapateena is yet another example of just how prospective South Australia is. The mine is also providing opportunities for businesses in the region, indigenous communities and is part of a growing confidence in the future for the Upper Spencer Gulf.
“The current project is expected to generate 65,000 tonnes of copper a year and 67,000 ounces of gold during a 20-year mine life, processing 4.25 million tonnes of ore a year and generating an average annual cash follow of $265 million.”
On 6 March OZ Minerals reported a scoping study on the Carrapateena block cave expansion, which showed that converting the lower portion of the Carrapateena sub level cave to a block cave would optimise value and further unlock the Carrapateena life of province plan.
OZ Minerals’ Carrapateena copper mine site. Image: OZ Minerals.
OZ Minerals chief executive Andrew Cole said annual throughput would increase from 4.25mtpa to between 10mtpa and12mtpa from 2026.
“A block cave expansion of the lower portion of the current Carrapateena sub level cave has the potential to increase average life of mine copper production from 65,000 tonnes per annum to about 105,000 – 125,000 tonnes per annum and reduce life of mine all-in sustaining costs to about US 90 – 95 c/lb,” Mr Cole said.
“Transitioning from a Carrapateena sub level cave to the block cave expansion would allow us to extract the higher-grade ore at the top of the orebody via the sub level cave (mining from the top down) and the higher-grade material from the bottom of the resource via the block cave (mining from the bottom up), and prioritise these over the lower-grade central section.
Mr Cole said the Carrapateena block cave expansion pre-feasibility study was expected to be completed by mid-2020 with first production from Carrapateena on track for Q4 2019.
Whyalla Steelworks
GFG Alliance was too pouring millions into new iron ore, steel and renewable operations, signing contacts in December 2018 worth more than $600m; with Danieli for a new, world-leading, state-of-the-art rail and structural heavy section mill, and CISDI Engineering, for a Pulverised Coal Injection (PCI) plant.
GFG Alliance executive chairman Sanjeev Gupta said the contracts would play a key role in securing Whyalla’s long term future producing 1.8 million tonnes of high-quality, high-end steel per year.
“This transformation will vastly improve the operational, financial and environmental performance of the operations, paving the way for Whyalla to become an enticing, global hub for innovative industry,” Mr Gupta said.
Mr van Holst Pellekaan said GFG’s investment in the Whyalla steelworks, the regions mines and its plans for renewable energy had delivered a massive boost in confidence in the Upper Spencer Gulf.
“GFG Alliance currently produces magnetite for the Whyalla steelworks and exports haematite. Its acquisition of the former Centrex iron ore assets on the Eyre Peninsula and its due diligence with Havilah Resources re its iron ore resources highlight the opportunities that exist in the region,” he said.
GFG Alliance executive chairman Sanjeev Gupta. Image: GFG Alliance. Photography: Sean Kelly.
The Marshall Government was working through the Steel Task Force to understand and facilitate GFG Alliance’s ambitions for Whyalla, and supported the take-up of renewable technologies through a power purchase agreement with SIMEC Zen Energy.
In addition, GFG Alliances’ SIMEC Mining had also extended due diligence at Havilah Resources’ Maldorky and Grants iron ore projects.
“SIMEC Mining’s decision to extend its exclusivity is a positive development for the potential commercialisation of Havilah’s iron ore projects,” Havilah chief executive Walter Richards said.
“We are encouraged by the recently completed diamond drill hole into the Grants Basin which intersected 486 metres at 24 per cent iron.”
Port Augusta
CU-River Mining was in the process of transforming the former Port Augusta power station in the Spencer Gulf with the proposed the $250 million port facility capable of handling iron ore, grain and other commodities.
It was expected that the facility would have an initial capacity of up to 15mtpa with a multi-stage development allowing future export potential in excess of 50 mtpa.
More than 150 people would be employed during construction and up to 100 permanent positions created once the facility was operational.
CU-River external affairs manager Shelaye Boothey said the retention of key infrastructure at the site, including a 5km rail loop and unloading systems, made the site an attractive proposition for CU-River.
“The purchase of the site is a significant, strategic decision that allows CU-River to secure a direct export pathway for the 15 million tonnes of high-grade iron ore magnetite it plans to mine each year from 2026,” Ms Boothey said.
“However, it is our intention to develop the port as a multi-user facility, providing Spencer Gulf and far-north industry with further export opportunities.”
Port Augusta in the Spencer Gulf of South Australia. Image: CU River Mining.
Since the power station ceased generation in May 2016, Flinders Power had been responsible for the decommissioning and demolition of the power station and rehabilitation of the site with sale of the site expected to be finalised in early April 2019, once remediation was complete.
“We are focussed on a successful transition to a new and exciting future for this significant infrastructure site,” Flinders Power chief executive Peter Georgaris said.
“I believe the transition of the site into a port facility is an outstanding opportunity for Port Augusta and the region.”
Mr van Holst Pellekaan was delighted that CU River and Flinders Power Partnership had been able to reach agreement on a sale that offered jobs and investment for Port Augusta.
“CU River’s proposal would re-establish Port Augusta as an international transport hub, using advances in ‘trans-shipping’ to access deeper water in the Upper Spencer Gulf to ship commodities such as iron ore,” he said.
